Even The Pathfinder Of The Two Years' Loss Has Four Risks Of Suspending The Listing. How Can We Lose The First Share Of Outdoor Products?

Pathfinder holding group Limited by Share Ltd (hereinafter referred to as "Pathfinder") issued a risk warning notice on the possible suspension of the stock market in the evening of September 23rd. The company has lost money for two consecutive years in 2017 and 2018. According to the rules of Shenzhen Stock Exchange listing, if the company's 2019 annual audit report is ultimately identified as a loss, the company's shares will be suspended from the date of the company's disclosure of the 2019 annual report. The Shenzhen stock exchange will make a decision whether to suspend the listing of the company's stock within 15 trading days after the suspension.


Reporters noted that this is the four time this month, the Pathfinder issued a risk warning notice to suspend the listing. Pathfinder also explained that according to the regulations, the listed company's losses for two consecutive years, when disclosing the subsequent first half year report, must issue a risk warning notice that the company's shares may be suspended from listing. Then it will be issued once every five trading days until the risk of suspension is eliminated or the decision of the Shenzhen Stock Exchange to suspend the listing of the company's shares.


Pathfinder said that although the company lost 2017 consecutive years in 2018 and 2018, the main business of outdoor products has been developing steadily and profitable for the past two years. The main reason for the company's loss is due to the impairment of goodwill, investment and assets that have not been anticipated in the earlier period. After 2016-2018 years of continuous three years' full accruals, the space and risk of further impairment of the company's pre investment projects in 2019 and subsequent years are very small.


Pathfinder said the performance in the first half of the year laid a good foundation for the achievement of the company's 2019 annual performance goals. In the second half of 2019, the company will continue to implement the annual business plan, focusing on resources to consolidate and promote the steady development of the main industries of outdoor products, dig deeper the subdivision needs of target customers, and continue to precipitate and upgrade the core competitiveness of products. Through the implementation of information upgrade and meticulous management measures, and aiming at non main business, based on the progress of post investment management that has been achieved, we continuously optimize the related business structure of non outdoor main business, integrate projects with deep collaboration with main industry, and continue to restructure and quit business related to outdoor main business.


The 2019 semi annual report released by Pathfinder showed that during the reporting period, the company achieved operating income of 691 million yuan, down 21.2% compared to the same period last year, net profit of 81 million 860 thousand yuan, an increase of 239.4% over the same period last year. Moreover, the Pathfinder expects net profit of 102 million yuan in the third quarter of 2019, up 302.58% over the same period. And said, "efforts will be made to ensure the achievement of the annual performance goals".


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Pathfinder outdoor plate two main brand Pathfinder, DiscoveryExpedition (DE) respectively realized income 472 million yuan, 57 million 504 thousand and 600 yuan, increased 8.11%, 17.78%, two quarter explorer, DE income 267 million yuan, 30 million 610 thousand yuan, 1.76% 1.76%, 28.07%. The slowdown in revenue growth during the same period was mainly due to a higher base of business income in the two quarter of 2018, and DE brand income maintained a relatively fast growth. At the end of June 2019, the number of brand stores of the Pathfinder decreased by 5.99% to 1192, and the company closed down low profit shops, optimized the channel structure, strengthened franchisee management, and drove the revenue growth year-on-year. At the end of June 2019, the number of DE brand stores decreased by 5.85% to 161.


The travel service sector revenue declined significantly, mainly because the Pathfinder reduced the low profit tourism business, stripped the green field network, and gradually withdrew from the outdoor main business. During the reporting period, the tourist business revenue of the Pathfinder decreased by 61% to 148 million yuan, and the main subsidiary companies easily adjusted the scale of the travel service business with a lower profit margin, narrowing the net loss to 469 thousand yuan in the first half of the year. Because the green international travel service did not achieve the performance appraisal conditions, the original shareholders would complete the equity repurchase by November, and the business of the green field network and six feet will also be integrated and reorganized to cooperate with the main business.


During the reporting period, the gross profit margin of the Pathfinder increased by 6.7ppt to 36.6%, mainly due to the decline in the proportion of the travel service business revenue with lower gross profit margin and the marginal improvement in gross margin. Sales and management fees increased by 5.6ppt to 30.9%. Net cash flow from operating activities was 85 million 450 thousand yuan, an improvement of 59.6% over the same period last year. Thanks to the improvement in the quarter sales and over time inventory, inventories decreased by 35.2% compared to the end of 2018.


GF Securities analyst Mi Hanjie believes that the trend of the turning point of the Pathfinder is clear, and the financial indicators are gradually improving. The leading position of the industry is expected to be maintained. The industry will recover and concentrate on the industry in the future. As the Pathfinder is in the process of shrinking the main business, the net profit margin will be distorted in the short run, and the medium and long term is expected to return to a reasonable level.


Everbright Securities Research Institute Li Jie judgment, in 2019, the Pathfinder brand channel adjustment basically in place, income growth, DE brand to enhance product positioning, expand high-end channels, revenue growth. Companies continue to strengthen outdoor products research and development, brand marketing, retail management, inventory management and other advantages, and strengthen online content marketing, commodity planning, promotion activities, through user operation to strengthen user stickiness, driven by an increase in electricity supplier income. Tourism sector will continue to reduce the low gross margin business, focus on mature business, and revenue is expected to continue to decline; in terms of profits, the inventor inventory clearance during the reporting period has led to a decline in gross profit margins of outdoor main businesses. Future Ltd has continued to strengthen dealer management and outdoor product retail price control, supply chain flexibility has opened up retail outlets, increased sales turnover rate, and promoted gross profit margins of main sectors of outdoor sectors; from the point of view of revenue structure, the company has gradually divestied tourism business, and the future gross profit rate of outdoor main industry revenue is expected to further improve, driving the overall gross profit margin to rise. Tourism sector easy to travel the world to reduce the low profit rate travel service business, 2019 loss in the first half of 468 thousand and 800 yuan, a substantial reduction of losses compared to the same period, it is expected that the future Pathfinder will continue to strengthen the management operation ability, enhance profitability.


As of press release, the Pathfinder reported 3.95 yuan / share in September 23rd, up 1.28%, and the market value was 3 billion 521 million yuan. As of August 31, 2019, the total number of Pathfinder shareholders reached 39 thousand and 200, an increase of 377 compared with the previous period, an increase of 0.97%, with an average holding 22 thousand and 700 shares per household.